Answer:
6745.09
Step-by-step explanation:
If we assume the nominal annual interest rate is 5%, then the future value after 6 years is ...
FV = P(1 +r/12)^(12·t)
for P = 5000, r = .05, t = 6.
Doing the arithmetic, we get ...
FV = 5000(1 +.05/12)^(12·6) ≈ 6745.09
After 6 years, the bank account will be worth 6745.09.
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We made a comment about the interest rate, because the annual <em>yield</em> is about 5.116%. If the <em>annual yield</em> is actually 5%, then the account value is lower: $6700.48. (Monthly compounding is irrelevant in that case, because it is already figured into the yield.)
Usually, the wording would be that the account <em>earns</em> 5% interest compounded monthly.
